Feb. 7 (Bloomberg) -- Caesarstone Sdot-Yam Ltd.’s 30
percent discount to its peers is attracting Baron Capital Inc.
as the Israeli maker of quartz-based countertops benefits from a
recovery in the U.S. housing market.

Shares of Caesarstone jumped 9.1 percent to $20.71
yesterday in New York, the highest price since the Sdot Yam,
Israel-based company began trading in the U.S. March 22. The
advance led gains on the Bloomberg Israel-US Equity Index of the
largest New York-traded Israeli stocks, which climbed to a five-week high. SodaStream International Ltd. rose the most this
year, while Allot Communications Ltd. dropped after Clal Finance
Batucha Brokerage Ltd. cut its price estimate.

Caesarstone reported better-than-expected fourth-quarter
sales yesterday and projected 2013 revenue that exceeded analyst
projections. The shares’ 88 percent rally since their New York
debut sent valuations to 13.6 times estimated earnings, compared
with an average multiple of 19.8 for companies on the Nasdaq
Industrial Index. Housing starts in the U.S., the fastest
growing market for Caesarstone, climbed 28.1 percent in 2012,
the best year for the industry since 2008.

“It’s always hard to come in to a stock when it’s up so
much, but it’s cheaper than its competitors in the space,”
David Kirshenbaum, an analyst at Baron Capital, the fourth-largest holder of Caesarstone with about 1.2 million shares,
said by phone yesterday from New York. “They are the innovator
and market leader. And the U.S. is finally bouncing off the
bottom of this cyclical housing downturn.”

IPO Performance

Caesarstone forecast revenue will reach $330 million to
$340 million in 2013, above the mean of four analysts’ estimates
for $327 million. Sales during the last three months of 2012
reached $76.2 million, the company said, beating projections for
$73.2 million.

Caesarstone is the second-best performing non-U.S. initial
public offering, behind Vipshop Holdings Ltd., a Chinese online
discount retailer that has returned 216 percent since March 22.
The company will benefit as quartz countertops displace common
materials such as granite and marble among consumers, Baron
Capital’s Kirshenbaum said.

Home prices in 20 U.S. cities in November rose by the most
in more than six years, fueled by mortgage rates near a record
low. The S&P/Case-Shiller Index of property values increased 5.5
percent from November 2011, data showed Jan. 29.

Baron’s Growth Fund has returned 18.2 percent over the past
year, beating 98 percent of its peers.

U.S. Housing

U.S. revenue for Caesarstone grew 45 percent in 2012 to
$86.8 million, making it the company’s fastest growing region
and second-biggest market after Australia, Chief Executive
Officer Yosef Shiran said on a conference call yesterday.

SodaStream, the maker of home soda machines, rose 5.5
percent to $50.98 in the U.S. yesterday, the biggest gain since
Dec. 17. The Airport City, Israel-based company’s flavor sachet
sales were “solid” and its gas exchange business showed signs
of acceleration, Jim Chartier, an analyst at Monness, Crespi,
Hardt & Co., who rates the company buy, wrote in a client note
yesterday.

Allot Retreats

Allot, the Israeli maker of products to track wireless
traffic, slipped 1.1 percent to $13.96 in New York, the biggest
slump in a week. The company’s shares in Tel Aviv added 0.5
percent to 51.91 shekels, or $14.06. Clal cut the Hod Hasharon,
Israel-based company’s price estimate to $18 from $24 after
fourth-quarter sales of $26.3 million missed the mean of 11
analysts’ estimates for $30 million.

Protalix BioTherapeutics Inc. slipped 2.8 percent to $5.98,
following a 15 percent rally on Feb. 5 in the biggest advance
since June 2009. Its shares traded in Tel Aviv today advanced
0.1 percent to 21.84 shekels, or $5.92.

Mellanox Technologies Ltd. rose 1 percent to $52.73 in the
U.S. yesterday, advancing for the first time in three days. The
Israeli stock added 0.8 percent to 192 shekels, or $52.16. The
Israeli maker of software used to transfer and store data was
rated a new buy at Janney Montgomery Scott LLC.